Winamp’s woes: how the greatest MP3 player undid itself

WASTE

But Frankel, the original creator of Winamp and Gnutella, wasn't out of ideas. Unfortunately, his ideas all made AOL furious.

Just as the RIAA was prepping lawsuits against Gnutella users, Frankel kept butting heads with AOL corporate headquarters in Dulles, Virginia—trying to get Nullsoft and himself out from AOL’s transcontinental reach. Besides Gnutella, which he released in September 2000, Frankel coded a program that blocked the ads on AOL Instant Messenger. After that, Dulles told him not to blog without approval.

"AOL as a company should not just sit on their asses and try to keep from losing as many subscribers as it can," he told Rolling Stone for its January 13, 2004 issue. "I mean, I'm a stockholder of the company. I want them innovating. I want them doing things that are good for the world and being socially conscious."

“‘We fought off the AOL bullshit as much as possible," he says. When the company tried to insist that an AOL icon instantly appear on a user's desktop during a Winamp installation, Frankel hit the roof. "I'd be like, look, our users don't want to use AOL!" he says. "They think AOL sucks!"

Winamp on life support

Probably the most surprising piece of the story is that Winamp didn’t die right then and there in 2004. For the next three years, the software seemed more or less in stasis—no new version appeared.

Ben London, an AOL senior technical manager, took the reins of Winamp in Dulles in August 2004. He admitted that AOL’s own corporate strategy, which kept shifting, slowed down development.

“There’s just not a long-term investment tolerance,” he told Ars. “We carve out a six-month road map, and then boom, re-organization into a different group, and new, different drivers would ask us to focus on a different aspect of the product.”

But Winamp ticked along. When the new, 10-year-anniversary edition of Winamp finally dropped in 2007, Winamp hit its peak in the post-Frankel era, with a 90 million active user base, according to London.

“Winamp had no business staff,” said Sam Weber, a longtime AOL manager who eventually became Winamp’s business development director in 2006 and its overall director from 2007-2008. “Ben London was managing five developers that were keeping shoutcast.com, winamp.com, and the client on life support.”

Weber told Ars that he and his team figured out something surprising about Winamp. While its numbers eventually dropped to all but negligible levels in the United States, the international market was a different story.

“What do you do if you have 50 million users around the world and 90 percent are outside the US and you have a six-person team in DC?" Weber wondered. When the team looked closer, it found that it had five million Turkish Winamp users and two million Brazilian users, among others.

The Winamp team tried to come up with a new business plan for Winamp, wondering if they could tack on a download service, a streaming service, or even just sell advertising against the installs.

“I think bit-by-bit what we mostly did was try to revitalize the community by re-releasing the product, updating it, both in terms of user interface and the codecs and technology with it, making Shoutcast easier and friendlier to use,” he added. “We started monetizing users who came to the site, and more importantly, we translated it into a number of languages.”

In short, the new Winamp team in Dulles began to figure out what AOL should have realized years earlier.

“The first is don't screw up a good thing,” Weber said. “Don't use it as a mechanism for delivering AOL-branded services. Help make it more relevant to people who do use it.”

So Winamp 5.5 added official German, Polish, Russian, and French support for the first time. But more importantly, the company started to figure out how to make money from users through what came to be known as the “freemium” model.

“You sell a premium version of the product,” Weber said. “You've got this freemium play and it gets big enough, if you can get one percent [of your customers to buy it], you can build a real business.”

Currently, Winamp Pro sells for $20, which, when multiplied by hundreds of thousands of paid users, works out to millions of dollars in revenue. Another way to make money is by selling ads directly on Winamp.com—and with the site doing several million total unique visitors a month, it's an easy way to earn some cash.

But there’s an even better way to make money: put a Winamp player inside a browser toolbar. As Weber explained, this generates “a hell of a lot of money—search makes a lot more than banner ads.”

“Google has a [search] deal with AOL, so we're distributed AdSense, in a branded, Winamp sense,” he explained. “Now you've got millions of queries a day, and we would promote eMusic. Anytime someone searches for something, you're getting a piece of that. That's real money for a little startup. If the model hasn't changed since I was there, it’s advertising against a big audience.”

Geno Yoham is the current man in charge of Winamp

AOL

A second coming?

15 years after its founding, all of Winamp's original employees are long gone (most have moved on to other positions in Silicon Valley, largely in the tech and music sectors) and the product has now existed longer without Frankel than with him. Its user base continues to stagnate as competitors like Rdio, Spotify, and Pandora—to say nothing of iTunes, which last year sold its 15 billionth song—continue to thrive.

But Geno Yoham, Winamp’s general director since October 2008, argues that Winamp will continue to do well as a media player, particularly in emerging markets where Apple hasn’t penetrated as well.

“iTunes is number one, and we’re number two,” he said. "There's a lot of value in the Winamp brand, the media player that's on your side."

Winamp says that it has around 30 million users worldwide currently (a figured based on comScore Web traffic analysis), with less than one million in the United States. The company is also starting to target specific platforms (read: Android) rather than specific markets. Winamp reports that since the Android launch of Winamp in October 2010, it has seen over 19 million installs. Could Winamp rise once more?

“We're thinking about [buying Winamp] again,” said Josh Felser, the former Spinner executive and current venture capitalist, who said he and other investors also tried to buy Winamp from AOL in 2003. He's still in love with the idea of Winamp, and with the community it spawned, and believes that someone could still capitalize on all that potential.

"Winamp had the start of something social in music," he said, dismissing the music sharing that Spotify is now doing on Facebook. “That’s just seeing what people are listening to. It doesn't feel right.”

“[Winamp] had a very distinct, edgy, tech-savvy community, and that's a valuable community to lots of people. That would be a big thing to understand. What are the set of features that we can attach to it to make it become more relevant again? I don't have it. I’d have to get serious about that.”

But, he admitted, no significant steps have been taken in terms of talking with AOL about a possible acquisition.

“Although the idea of starting with that basis [of an existing community and a history] is exciting,” he said with a grin, “I haven't given it more than five minutes thought.”

Promoted Comments

Wondered where WinAmp went. I had a crashed install with it years ago and decided to dump it. This article tells me it was a legit product. Wow. I thought I'd been dumped on. Turns out I had been. Digital version of getting 3 or 4 of those damn AOL CDs per week in the mail. One year I cut them up into shapes and used them as tree ornaments at Christmas. They were especially interesting after being nuked in microwave for 4 or 5 seconds.

When I started seeing AOL crap popup during install (virus scanner caught file names and popped them up on screen) I shut down the install by disconnecting RJ45. Shut down the processes running during install, cleaned out registry and folders. I wondered if I had made a bad decision BUT now I know why it was a good idea.